An interview with Chet Holmes
This is a bit of a departure from the usual format for our interview feature, but this one is a little more personal for me.
I am compiling my favorite interviews into book form, and it has been a gratifying process for a number of reasons. First of all, I am really excited to be able to package these into one volume of wisdom for readers.
Many of the people I've interviewed were virtual mentors for me. Although the instruction wasn’t face to face, I absorbed their lessons through books, CDs and tapes that I wore out from listening (remember cassette tapes?). They inspired me to start InsuranceNewsNet and learn new ideas, and they accompanied me during the difficult times that any entrepreneur endures. The other gratifying part of this process is revisiting my early interviews with people I considered rock stars in my earlier days — people such as Chet Holmes.
Chet’s interview was the first that we published when we started this series in 2010. I have to confess that I was nervous about speaking with him because here was a guy I had been listening to for many years, and this time I would be able to ask him questions. Of course, Chet put me at ease and shared his wisdom.
He wasn’t a big name like Tony Robbins, but he was an inspiration to Tony and later became his business partner. I was always amazed that more people didn’t know about Chet, because many of his ideas have become the foundation of successful business and personal management. His clients included major companies such as Pacific Bell, NBC, Citibank, Warner Bros., GNC, Wells Fargo, Estee Lauder, Merrill Lynch and W.R. Grace. Chet had been talking for decades on being strategic and getting beyond the next tactic. He distilled his ideas into the 2007 book “The Ultimate Sales Machine” (which I think everyone should read).
But Chet’s key lesson was focus. He was excellent at removing the sales shellac to reveal the real value in a message or a mission. A method he employed was to do what was called a “stadium pitch,” which was part of his greater concept of the “core story.”
The stadium pitch was the message that you would deliver to a stadium full of every one of your prospective clients. The idea was a way to synthesize your value proposition into its most efficient and compelling form.
When I looked back at the transcript of our conversation, I saw that Chet had used the stadium pitch to launch into a model of how an insurance agent and agency can hone a highly effective strategic focus. We used only part of that discussion in the version we published in 2010. We typically have about 10,000 words in our transcription, which we edit to about 3,000 for print.
I constantly use Chet’s principles in developing marketing strategies, and I think anybody in sales should be familiar with these techniques. In this interview, he drew an excellent outline of how people can stand out in their market. Make no mistake, Chet’s methods are old-school sales techniques that get you in front of prospects in a position of authority.
As this year unfolds, we face quite a bit of uncertainty. The Department of Labor’s fiduciary rule is one factor, as is the Security and Exchange Commission’s version of that rule later this year. The American economy itself seems to be undergoing a slow upheaval that is difficult to gauge. The upcoming political campaigns will be getting more intense, if that is even possible. All of us will be looking toward the people who can bring clarity to the conversation and leadership to their clients and communities.
You can be that voice of clarity whenever you speak if you know how to craft the message. In this conversation with Chet we focused on the insurance sale, but these ideas can transfer to any purpose. I hope you enjoy this discussion as much as I enjoyed revisiting it.
FELDMAN: Most insurance sales are one-on-one or in small groups, so why is it important for agents to know how to deliver a stadium pitch?
HOLMES: Business people need insurance, but they don’t even know that. Most people are very unsophisticated about this kind of thing. So, that’s a scary phone call for an agent to make. How do you develop the strategy for what to say? A stadium pitch is strategic. It establishes your credibility and educates.
FELDMAN: Do you usually find that people are unprepared to make a strategic pitch to large groups?
HOLMES: When I ask an audience of 1,000 people whether I could put them in front of 300 wealthy individuals, how many would be ready to present to all of them, maybe two raise their hand.
If I asked them what they wanted to accomplish in that stadium, they would say they want to make a sale. When I ask, “What else?” they would ask, “What else is there?”
There are 14 strategic objectives that you should want to achieve in that stadium, but let’s talk about just one of them: establishing a high level of credibility and expertise. This is when someone says, “That guy is way smarter and more impressive than my current insurance agent.” How are you going to do that and do it quickly?
FELDMAN: How do you help insurance agents develop an effective stadium pitch?
HOLMES: The first thing I do is have people write their stadium pitch. Then I get things like, “Why I’m better at giving you insurance than somebody else” or “The five ways I can help you better than the next agent” or “Why you should buy your insurance from me instead of anybody else.” Most of those titles are focused on themselves.
So then I make it harder. I tell them to pretend that the audience doesn’t have to stay if they hear the title and feel that they already have that part of their life covered. You know the Buyers' Pyramid, so only 3 percent of the audience is going to want to hear something with one of those titles.
FELDMAN: I’m familiar with the Buyers’ Pyramid from your book, but would you mind explaining what it is and how it applies here?
HOLMES: For decades, whenever I’ve done a live event, I have been able to poll thousands of people at a time and ask them if they were “in the market” for such things as tires, cars or home remodeling. I found that, across the board, only 3 percent of any market is in the “buying mode” now for anything.
They are at the top of the pyramid of five key groups. The other four groups are the 7 percent who are open to considering such a purchase, 30 percent who are not thinking about it at this time, 30 percent who don’t believe they are interested based on the information at hand, and 30 percent at the bottom who are definitely not interested. So, the average person would walk out.
A slightly more strategic type might say, “I’m here to tell you the five ways people are underinsured.” That’s better, but it still sounds like you are trying to sell me insurance.
A strategic title would be where nobody would leave the room. That might be, “I’m here to tell you the five ways you and your family can be financially devastated.”
The audience would say, “Well, let’s hear the first way, because I’m not leaving if that’s your title. I need to hear how my family can be financially devastated.”
FELDMAN: That is definitely a stronger title. And, of course, can’t that title be used for marketing other than a stadium pitch?
HOLMES: We would use something like that for what we call the Best Buyer or Dream 100 mailers. I typically find, in any business, there are 100 clients who would dramatically change things if you got them. We would use titles like that to make our best offers to them.
FELDMAN: Isn’t that what you did when you worked with Charlie Munger, Warren Buffett’s business partner?
HOLMES: Yes, when Charlie put me in charge of ad sales for one of his magazines. It had a list of 2,200 potential advertisers. And when I did an analysis of the market, I found 167 of them bought 95 percent of the advertising in the industry and none of them were in the magazine. We were No. 15 in the industry.
They used to do this monthly campaign in which they targeted the 2,200, and it was kind of wimpy. I took the same budget, and we spent it on 167 executives. Suddenly, people who never heard of us before were hearing from us so intensely and from every direction that within six months we had 29 of them in the magazine. That alone doubled ad sales for the magazine.
We doubled it again the next year by keeping them in the magazine and bringing in another 30. The next year, we doubled it again by bringing in the rest of the 167 ideal buyers.
It was amazing. It was the biggest advertising success story in that industry. So, every industry has a small niche of ideal buyers. The problem is that people go after all buyers. But here was the lesson: When the best buyers buy, other best buyers buy faster. That’s not easy to say. Anyway, it is worth going after them.
FELDMAN: I would like to ask more about the mailer. Once you have sent it, what is the follow-through?
HOLMES: In the example of the stadium pitch, we’re expanding it to a Dream 300. What would you say to them? You would say, “Here are the five ways that you can be financially devastated in your family or your business” and then make an offer. In a mailer, the offer would be “Call now for a free report.”
When the person calls for the report, you take down his information and then say you need to ask a few questions because you have a lot of information designed to help people be more financially successful. The person most likely will agree, and now you have permission to start asking questions.
You find out he is a first-generation business owner. “Are you planning to pass the business on to other family members? Oh, you’re looking to sell. We selected you because of the size of your business, and I can look up the file, but can you give me an idea of what your business is doing annually? How much are you pulling out of it? Thank you. Let me tell you about this report we can put together for you …”
I am going to use that report as leverage to get an appointment. But the whole focus has to be on them, not on you. If you start saying, “What kind of life insurance do you have?” and “I’d love to come talk to you about your life insurance,” all of a sudden you went from being a strategist to being a tactician.
FELDMAN: What is the report, and how do you position it?
HOLMES: You say, “We did research on what makes companies and generations wealthy. Are you interested in creating wealth that lives beyond your generation? Yes? This report discusses that as well as things that can devastate you financially. We have distilled all this research to five key strategies that will protect you against financial devastation and help build lasting, generational wealth.”
You tell him that your company sent the mailer to hundreds of companies like his and you’ve had a tremendous response, so you are doing a tour to deliver the report in a 28-minute presentation. “I am coming through your area in the next two weeks, so when is good for you?”
FELDMAN: Suppose he asks you to just send the free report?
HOLMES: You say, “We tried to do this as just a written report but nobody would read it, and our real objective is to help you be more successful. That’s why we do these tours.”
Your fallback would be doing it right over the Internet with something like GoToMeeting. You can direct them to the Web address and do the 28-minute presentation that way.
FELDMAN: What would the report focus on, and how would someone put one together?
HOLMES: When you walk out into that stadium, the first thing you want to do is say something that makes people say, “Wow.” The way you do that is to look at data over time.
For example, you could say that 20 years ago, all of America was employed by 4 million businesses. Take a guess at how many businesses there are today. The prospect is sitting there saying I have no idea, and you click and say 28 million. That means a lot of people like you started their own businesses.
And you move on to market data. That’s an example of interesting data points that capture attention.
You can hire a third-party researcher or look into studies available on the Internet. The important thing is that it establishes your authority and credibility. You will need information that gives real insight into the prospect’s situation. But the minute you turn into a salesperson, you’ve lost credibility.
What you’re teaching them is a righteous setup for a deeper understanding of what insurance can do and how it really protects the family. But you’re not selling insurance — oh my God, don’t start selling insurance.
Then you get to the end, and it’s tongue in cheek, but the actual words on your PowerPoint slide say, “And now a word from our sponsor.” And at that point you ask, “Would you like to hear a little bit about what we do?”
If you’ve done a great job and it was all great education, they will want to show it to their wives and employees. Then you’ve got a serious growth strategy.
FELDMAN: The key would be getting the relevant information that also has impact.
HOLMES: You want them to say “wow” 10 times in 10 minutes. It takes work to develop the information and then practice to present it.
It’s what we call commitment to mastery, and this is the key ingredient.
My father was a Marine combat instructor, so I started studying karate very, very early. And people ask what the secret is to becoming a karate master. It’s not doing 4,000 karate moves. It’s doing 12 moves 4,000 times each. That’s what makes a master.